Binance said on Friday it had stopped selling digital tokens linked to shares, as Hong Kong’s financial watchdog became the latest in a string of regulators to crack down on the cryptocurrency exchange platform’s “stock tokens” offerings.
Stock tokens are digital versions of equities pegged to the value of the relevant share. They are usually bought and sold in fractional units, unlike traditional equities.
“Effective immediately, stock tokens are unavailable for purchase on Binance.com,” the exchange said on its website, adding it would cease all support for the products in October.
Global scrutiny of the cryptocurrency sector has grown amid worries over lax consumer protection and the use of digital coins for money laundering, with authorities in recent months zeroing in on Binance, one of the world’s biggest platforms.
Hong Kong’s Securities and Futures Commission (SFC) said after Binance’s move that the exchange was not licensed to carry out regulated activities in the city. Offering stock tokens to the Hong Kong public without authorisation could be an offence it added.
“Any person who contravenes a relevant provision may be prosecuted and, if convicted, subject to criminal sanctions,” the SFC said.
A Binance spokesperson declined to comment on the SFC’s move, which came a day after Italian regulators made a similar announcement.
Binance does not currently have exchange operations in Hong Kong and takes its legal obligations seriously, the spokesperson added.
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